Adult mesenchymal stem cells (MSCs) are an attractive cell source for cartilage tissue engineering. In vitro predifferentiation of MSCs has been explored as a means to enhance MSC-based articular cartilage repair. However, there remain challenges to control and prevent the premature progression of MSC-derived chondrocytes to the hypertrophy. This study investigated the temporal effect of transforming growth factor (TGF)-β and β-catenin signaling co-activation during MSC chondrogenic differentiation and evaluated the influence of these predifferentiation conditions to subsequent phenotypic development of the cartilage. MSCs were differentiated in chondrogenic medium that contained either TGFβ alone, TGFβ with transient β-catenin coactivation, or TGFβ with continuous β-catenin coactivation. After in vitro differentiation, the pellets were transplanted into SCID mice. Both coactivation protocols resulted in the enhancement of chondrogenic differentiation of MSCs. Compared with TGFβ activation, transient coactivation of TGFβ-induction with β-catenin activation resulted in heightened hypertrophy and formed highly ossified tissues with marrow-like hematopoietic tissue in vivo. The continuous coactivation of the 2 signaling pathways, however, resulted in inhibition of progression to hypertrophy, marked by the suppression of type X collagen, Runx2, and alkaline phosphatase expression, and did not result in ossified tissue in vivo. Chondrocytes of the continuous co-activation samples secreted significantly more parathyroid hormone-related protein (PTHrP) and expressed cyclin D1. Our results suggest that temporal co-activation of the TGFβ signaling pathway with β-catenin can yield cartilage of different phenotype, represents a potential MSC predifferentiation protocol before clinical implantation, and has potential applications for the engineering of cartilage tissue.